Life insurance policies provide a cash payment when a person dies. This cash payment can protect your loved ones that depend on you, or it can be used to leave a cash gift to your family members. Understanding the different types of life insurance can help you to choose a plan that fits your needs.
Term life insurance is based on a term that you choose in years, such as 10, 20, or 30 years. If the insured person dies within the term, the insurance company pays the death benefit to the beneficiary. If the term expires and the insured is still living, the term ends, and the insured will need to purchase a new term. Term life insurance is usually the least expensive option with low payments at the beginning, and then they increase as the insured ages. Term life insurance has no cash value.
This type of policy pays the death benefit no matter when the insured dies. The full premium must be paid each year. Unlike term life insurance, whole life policies have cash value. The amount of difference in money between the actual cost of the insurance and the premium is put into a cash value account. The cash value can be used in later years of life to cover the premiums, or the owner can borrow against the cash value or receive the cash value when a policy is canceled.
Silverton Insurance Specialist, LLC offers this type of coverage as a similar policy to whole life, except that the owner can pay more than the premium. This amount goes into a cash value account. Most universal life policies pay a small amount of interest on the cash value. After a year, the owner can decide not to pay the premium and use the cash value to pay the annual costs.
This type of policy allows the cash value to be invested in stocks, bonds, and other assets. It allows the cash value to grow at higher rates of interest than other life insurance policies. You may incur losses on this type of policy. This type of policy is best for people who want lifetime coverage and who can tolerate the risk associated with it.
Contact us at Silverton Insurance Specialist, LLC to discuss which life insurance policy best fits your needs. We can hand tailor a plan that fits within your budget to protect your family.